The cycle of poverty
January 20, 2007
It is one thing for a country to be small but it is another to be small and poor. The disadvantage rests in the fact that such a country commands precious little respect anywhere. Its leaders are often ignored by others outside its borders and above all, it is prone to instability because its frustrated people would react violently at the drop of a hat.
Our little corner of the world has many poor countries with Haiti often referred to as the poorest, and Guyana being the second poorest. But tell any Guyanese that his country is poor and he would raise his eyebrows in amazement.
Haiti , because of its poverty, is always prone to revolts and revolutions. However, the catch is that many believe that the poverty stemmed from the very revolts and revolutions.
When that country fought its war of independence from France the reports are that the destruction was such that to this day, some 200 years later, the country is still to recover from the devastation. A sizeable portion of that country is barren land, the result of the flooding with sea water.
Guyana is a different kettle of fish. Indeed it had its share of revolts but these occurred long before the country even dreamed of being independent. These were struggles against oppression and whatever damage resulted from those activities were easily corrected.
Guyana 's poverty stems from the attitude of its people with the support of its government.
Before independence the people worked long and hard because the colonial masters insisted on their labour and in turn, paid them what was considered by the rulers, a living wage. For the greater part, the money paid barely afforded the people a lifestyle deserving of the effort they put out to earn their pittance.
Infrastructure was minimal; there were no electricity except in the capital; roads were little more than dirt tracks and housing was limited to logies and shacks except in rare cases.
And of course, the country was merely a producer of primary products which the Mother Country gobbled up, refined and exported for huge profits.
Independence came and the task of developing the country began. Huge sums had to be borrowed from the international agencies. This money had to be paid back with interest and as everyone knows, infrastructure is often not intended to generate revenue.
Two major roadways collected toll to cover the cost of their construction—the Corentyne Highway and the Soesdyke-Linden Highway — but this money was certainly not enough to erase the debt.
People continued to work hard but there was a marked relaxation in supervision to the extent that lateness and absenteeism became regular features at the workplace.
People do live better; their homes are so much better and just about every community enjoys electricity.
The problem is that taxation and a rising cost of living have eroded their earnings. People who once earned enough to enjoy a reasonable standard of living now find that they can barely survive. The Catch 22 is that these people have to sacrifice going to work some days and production invariably drops.
Unfortunately, because of IMF restrictions, Guyana cannot institute price controls. The international agency insists on a free-market economy. The result is that the merchants hike their prices, spend money on imports that many would consider exotic foods and generally set about killing the very people who must keep them alive.
At the same time, the government taxes these merchants who have become adept at tax dodging so that the government efforts invariably falls back on the very people who are already finding it difficult to make ends meet.
This cycle needs to be broken. Guyana needs to stop being a producer of primary products. We are seeking investors but these investors do not come to refine anything.
Perhaps the time is nigh for the government to invite people to set up canneries, to make products such as breakfast cereal from rice and other such grains, and above all, to create goods that would be demanded by the outside world.
Failing to do these things we would continue the downward spiral, fuel the brain drain and condemn ourselves to perpetual poverty.